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Intel's Value Chain

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Essay title: Intel's Value Chain

Intel’s Value Chain

Since 1998, Intel has developed and used an e-business strategy to maintain relationships with its customers, employees and suppliers. The company’s goal is to become a 100% ‘e-business enabled’ corporation. In terms of the value chain concept, Intel has reaped tangible benefits in the volume of business it does on the Web, as well as created savings of time and money for both itself and its customers.

Intel's strategy in terms of the primary value chain activities:

Inbound Logistics: Intel used the traditional methods of pen, paper and telephone to place and track its supplies and suppliers. Furthermore, it ordered supplies only in response to customer orders. Today, Intel uses the Internet to speed the flow of information between itself, its suppliers and customers. By tracking its deliveries and supplies, from various countries all over the world, over the Web, the company has reduced its order and manufacturing lead times.

Operations: Intel uses its Web based e-business system to aid in the quick exchange of details and queries pertaining to customer orders, design specifications and proprietary information.

Outbound Logistics: Intel uses its web based system to track deliveries to customers and resellers. Using its ‘vendor driven’ inventory management system, Intel can maintain its inventory levels to respond to fluctuating customer demand, make reliable forecasts and shipments on time.

Marketing & Sales: By putting its customer order entry system on the Web, it has reduced errors by 75%. It can take orders round the clock, where more than 25% of its transactions occurring after normal business hours. Hundreds of Intel suppliers use the Web to check the status of inventory levels, payments and shipments.

Service: Intel focuses on many areas of support and service for all its products. From advanced data centers, application platforms, architecture planning, integration of business applications, e-commerce applications and solutions, system migration and server consolidation. Intel provides a variety of services in the areas of wireless, hardware design, networking and communications, software development, business strategies and solution providers. Intel has established alliances with other leading software technology providers and solutions such as Oracle and SAP to give added value to its customers.

Intel’s strategy in terms of the secondary value chain activities:

Procurement: More than 50 of Intel’s most important material suppliers have online access to confidential engineering and product-specification documents, reducing the amount of time it takes to design products and get answers about Intel’s needs. Using a “vendor-managed inventory process,” allows Intel to accurately reconcile its suppliers’ inventory on hand, materials in transit, and shipment projections with a customer’s shop-floor consumption rate. The process has given Intel more-accurate forecasting data and allowed the company to respond

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